Amazon

Amazon's cloud business just grew 37% in a single quarter, its fastest pace in 18 quarters, hitting 42.2 billion dollars in sales and a 169 billion dollar yearly run rate. Cloud profit alone jumped to 16.6 billion dollars, up from 10.2 billion a year ago. That one division now earns more than most companies in the world make in total.

Amazon's homegrown chip business and its AI business each blew past 25 billion dollars in yearly revenue, both growing triple digits. The two biggest AI labs in the world signed multi-year, multi-gigawatt deals to use Amazon's Trainium chips. Meanwhile advertising grew 26% and total profit from operations climbed 43% to 27.5 billion dollars.

Building all that AI capacity is brutally expensive. Amazon spent an extra 66.1 billion dollars on property and equipment over the past year, which flipped free cash flow from a positive 18.2 billion dollars to a negative 7.6 billion. If AI demand cools before those data centers pay off, that spending becomes a very costly mistake.

Amazon told investors next quarter's sales should land between 197 and 202 billion dollars, growth of roughly 9%, a sharp step down from the 20% it just posted. The headline profit of 62.6 billion dollars also flatters the picture, since 53.4 billion of it came from a paper gain on its Anthropic stake, not from selling anything.